Loaded Issue: Pallet Makers Sling Mud Over Who's Greenest

The allegations are neatly stacked. On one side, the wooden-pallet industry. On the other, plastic-pallet makers.

The two camps—part of a $10 billion-plus industry for makers of portable platforms that are used to transport products from warehouse to store—are feuding over which is greener.

Intelligent Global Pooling Systems Inc., a plastic-pallet company in Orlando, Fla., is suing the National Wooden Pallet & Container Association in federal court in Dallas. Intelligent Global Pooling alleges the "attack dog" trade group mounted an unsuccessful "conspiracy" to link plastic pallets to a contaminated stick of butter found in Texas last year. The lawsuit, referring to the butter, alleges a "malicious smear campaign."

ENLARGE

Wooden pallet

The trade group denies wrongdoing. It argues that it is the one that has been taken to the woodshed. It points to press releases from its plastic rivals calling wooden pallets bacteria-infested, nail-ridden fire hazards that kill trees.

"They are bullies," says Bruce Scholnick, president of the National Wooden Pallet & Container Association, in Alexandria, Va. "There is no question in my mind they started it."

Pallet analysts won't take sides. "Oh, it's quite heated—I would never say one is better or worse or cleaner than the other," says Matt Zielenski, an analyst at the Freedonia Group, a Cleveland research firm.

Pallet academics lament the load being placed on the lowly workhorse of the supply chain. "The tactics are bringing so much negative limelight to the poor pallet," says Ralph Rupert, director of the Center for Unit Load Design at Virginia Polytechnic Institute and State University.

While consumers may never ponder the pallet, two billion are in circulation in the U.S., according to Virginia Tech. Most household goods, from washing machines to orange juice, ride on a pallet at some point. For 70 years, most pallets have been made of wood.

ENLARGE

Pallets of canned vegetables sit in a warehouse.
Getty Images

Though ubiquitous, wooden pallets have never had an entirely smooth ride. Many landfills won't accept them. They get ditched, creating eyesores—though increasingly they are being repaired and reused or ground down for mulch.

Plastic pallets, relative newcomers, are recyclable and lighter, so less fuel is used in transport. It is easier to put microchips in them, which makes them easier to track.

Yet they too are burdened with issues. They are more expensive than wood pallets, and have come under scrutiny from consumer advocates for containing fire-retardant chemicals that some environmentalists fear could taint food. Plastic proponents deny any serious threat but have begun to use more palatable fire-retardants.

The growth of plastic pallets has accelerated in the past few years, as companies search for greener supply chains, says Mr. Zielenski, the analyst.

Roughly 65% of the pallets in the U.S. are wooden, but "plastic pallets have gained market share fairly rapidly, and the wood people want to stem that," he says. Adding to the tension, "green is a huge selling point" and both sides claim to be greener.

Pallet makers are piling on, in marketing materials, radio advertising and at trade shows.

"Plastic is the way to go unless you want wood chips in your kids' cereal," says Chris Macchione, the company's national accounts manager.

The website pallettruth.com, headed by Plastics.com LLC, claims to promote "straight talk about wood pallets," saying they are "laden with bacteria," "contribute to global warming," and "fuel powerful fires that shatter lives."

Greg Koski, founder of Plastics.com, a national online plastics forum, said the website is a defense against the wood-pallet industry, which "wants to put plastic pallets out of business."

Rubbish, say the wood people.

"The truth is it's the plastic pallet that is the greater fire hazard," says Agco Recycling LLC, a wood-pallet manufacturer in Quincy, Ill., on its website. It claims that in a fire test, "burning, dripping plastic from the plastic pallets pooled and burned on the floor."

Plastic "breaks easier than wood when hit with a forklift and then [the pallets] end up in the Dumpster. Does that sound green to you?" asks another company, Dominion Pallet Inc., a wood-pallet company in Mineral, Va., on its website and Facebook page.

Michael Smith, chief operating officer of Palnet, a Vineland, N.J., wood-pallet company, says tough language against the plastic folks is justified. "The wood-pallet industry has been under attack from the plastic-pallet community for the past two years," he says.

The animosity got worse last December, when University of Texas researchers published the butter brief.

One of 10 sticks of butter bought at Dallas grocery stores showed a high level of a widely used flame retardant, according to university researchers, noting that animal studies have linked consumption of the compound to hormone changes in rodents.

The researchers speculated about causes, saying the butter's wrapper may have been the culprit. But they never mentioned pallets, says Arnold Schecter, a professor of environmental and occupational health sciences who led the study.

Mr. Schecter, to his surprise, was bombarded with calls and emails from both sides of the pallet feud, seeking clues. "I never got so many inquiries in decades and decades of publishing," he says.

The National Wooden Pallet & Container Association said in a press release at the time that plastic pallets should be explored as a possible cause of the tainted butter—a suggestion that the plastic contingent says led to the lawsuit.

"I never said it was them," says Mr. Scholnick, referring to his wood group's press release, titled: "Plastic Pallets Should Be Investigated in Butter Contamination Scandal." "I don't even know what the butter rode on—plastic or wood. I was just saying, 'Explore it.'"

Mr. Rupert, the Virginia Tech pallet expert, wants to see the dispute packed up and shipped off. He says it has gone beyond competition and become mudslinging. "I think both sides get hurt," he says.

This copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.